Raise Your Earnings - Altering Your Trading Plans To Match Market Conditions

When I first began trading back in the '90's, I was really fortunate. I had started trading at a time when the market was headed virtually straight up. My first strategy was writing covered calls which blended with a rising market in such a way that I almost never lost.

The perspective of time has allowed me to learn that no market, good or bad can last forever. The one constant is change. Under such conditions, I learned to 'go with the flow', adjusting my strategies to match market conditions.

Medium Term Trades

As I explained earlier, my favorite medium term strategy has long been the covered call. This strategy enabled me to control my fiscal affairs. By setting up trades created specifically to 'mature' at a predetermined date thirty, 60 or 90 days out into the future, it gave me cash I could count on to help overcome any slow periods of daily cash flow.

As the premium began to dry up, I discovered writing covered calls a lot more difficult. I began to look particularly for those stocks which were volatile, which could be used to temporarily replace covered calls as my medium term technique of choice.

Stock Movement

Let's search for a stock which moves frequently. I have my Chart Navigator system provide this by quickly calculating the average daily range of stock for the last month or so. I will then look only at the stocks which have at least a dollar and fifty cents or more movement each day.

You have to have some idea of WHICH way they are most likely to move. We also narrow this search of high volatility stock to only those stocks which move in a somewhat predictable range, much like a 'channeling' stock.

Given these facts, let's look for a few more characteristics. First, notice that the stock has remained close to or within this range for several months. Additionally, every 'oscillation takes upto a month, moving from the top of the channel to the bottom.

Bottom line, this stock is moving considerably, but going basically sideways. Now, let's trade this one medium term. If we can do that regularly, then perhaps we can stop worrying about the availability of covered call trades!

The Trade

Just before you trade a stock, it is generally an excellent idea to know which way it's going. That's the challenge! Trade it BOTH up AND down. Those are the only two ways it's likely to go (remember the high day-to-day movement).

We know we can't acquire the stock And short the stock (at least not inside the same account), so why not buy a put And a call?! In this case we might consider buying the thirty five dollar put and the thirty five dollar call. Normally referred to as a 'long straddle', the position enables us to profit no matter WHICH way the stock moves.

Now, isn't it time to adjust your strategy to match market conditions? If you're a little hesitant or perplexed in any way, employ the assistance of an investment professional. They can be easily located on the internet by doing a search for: reverse mergers, company going public, or reverse merger shell. Sooner or later, it will grow to be easier for you to 'go with the flow' as well.

Penny Stock Investing For The New Investor Or The Professional Investor
For those wanting to get a taste of trading, but do not know much about the stock market, penny stock is a great place to start. They are stocks that trade for as low as 1 cent, but they cost no more than $5.

Choose Your Investments Wisely By Determining Your Investment Style
Knowing what your risk tolerance and investment style are will help you choose investments wisely. The three investment styles are conservative, moderate, and aggressive.

Make Sure That Your Financial Status Is In Very Good Shape Just Before You Start Investing
Before you consider investing in any type of market, you should really take a long hard look at your current situation. Investing in the future is a good thing, but clearing up bad (or potentially bad) situations in the present is more important.

All You Should Understand Before You Make An Investment In Bonds
There are certain things you must understand about bonds before you start investing in them. Not understanding these things may cause you to purchase the wrong bonds, at the wrong maturity date.

Investing Flaws To Avoid - A Succinct Guide
Along the way, you may make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor.

Different Forms Of Stocks That One Can Buy
Investing in bonds is very safe, and the returns are usually very good. There are four basic types of bonds available and they are sold through the Government, through corporations, state and local governments, and foreign governments.

Safe-Guard Your Wealth By Investing In American Silver Eagles
The US Mint first released the American Silver Eagles back in November, 1986. Initial inventories sold out due to the unexpected high demand. Along with American Golden Eagle Coins, American Silver Eagles were offered as a very viable alternative investment to the existing gold and silver bullion coins being produced by other countries.